DOCSLIB.ORG

The Weight of a Libra: Are Stablecoins a New Challenge for External Statistics Compilers?1

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Weight of a Libra: Are Stablecoins a New Challenge for External Statistics Compilers?1 IFC Conference on external statistics "Bridging measurement challenges and analytical needs of external statistics: evolution or revolution?", co-organised with the Bank of Portugal (BoP) and the European Central Bank (ECB) 17-18 February 2020, Lisbon, Portugal The weight of a Libra: are stablecoins a new challenge for external statistics compilers?1 Alessandro Croce, Marco Langiulli and Giuseppina Marocchi, Bank of Italy 1 This presentation was prepared for the meeting. The views expressed are those of the authors and do not necessarily reflect the views of the BIS, IFC, BoP, ECB or the central banks and other institutions represented at the meeting. 1/1 The weight of a “Libra”: are stablecoins a new challenge for external statistics compilers? Alessandro Croce, Marco Langiulli and Giuseppina Marocchi1 Abstract In June 2019, Facebook released a White paper, providing details about a new digital asset called Libra, to be launched in the first half of 2020. Libra is conceived as a low volatility digital coin (stablecoin), fully backed by a reserve of liquid assets and managed by an independent organization. Other Big-Tech companies could follow suit with similar initiatives, eventually reshaping the financial sector: given their (alleged) capacity to preserve value over time and the reputation of their proponents, these coins could rise as global payment instruments as well as novel reserves of value. Regardless of any technical details and contingent regulatory requirements, the purpose of this paper is to evaluate and highlight the impacts of such instruments on external statistics compilation. After a brief digression on digital assets’ features and classification, the potential effects on a few Balance of Payments’ items are discussed: workers’ remittances, digital trading and financial account. Keywords: crypto-assets, stablecoins, Libra, balance of payments, remittances, payment services. 1 Bank of Italy, Directorate General for Economics, Statistics and Research. The authors wish to thank Riccardo De Bonis and Giuseppe Ferrero for their helpful comments. The views expressed in the article are those of the authors and do not involve the responsibility of the Bank of Italy. The weight of a “Libra”: are stablecoins a new challenge for external statistics compilers? 1 Contents The weight of a “Libra”: are stablecoins a new challenge for external statistics compilers? .......................................................................................................................................... 1 1 Introduction ....................................................................................................................................... 3 2 New digital forms of money ....................................................................................................... 4 2.1 Crypto-assets .......................................................................................................................... 5 2.2 Stablecoins .............................................................................................................................. 5 2.3 Global Stablecoins ................................................................................................................ 6 3 Impact on External statistics........................................................................................................ 8 3.1 Digital assets in the context of macro-statistics ....................................................... 8 3.2 Remittances ............................................................................................................................. 9 3.3 Trade in goods and services ........................................................................................... 12 3.4 Financial account ................................................................................................................. 13 4 Concluding remarks ..................................................................................................................... 17 References ................................................................................................................................................ 19 Annex A: Libra ......................................................................................................................................... 20 2 The weight of a “Libra”: are stablecoins a new challenge for external statistics compilers? 1 Introduction In June 2019, Facebook released a White paper2, describing the main features of a new digital currency named Libra. According to promoters, this new instrument for international payments and transactions should hit the market during the first half of 2020. In the days following the announcement, financial institutions, politicians and regulatory agencies began raising concerns on issues such as: privacy, money laundering, consumer protection and financial stability. Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight. Sherrod Brown, American Senate Banking Committee Even though details are still unavailable at current time, regulators have been analyzing the project to cope with any possible risk and opportunity related to the innovation3. For instance, Bank of Italy’s working group on financial innovation set up a task force to evaluate implications on some of its institutional functions (payments system, supervisory activities, financial stability and monetary policy). Hence, as compilers of the Italian Balance of Payments and International Investment Position, we would like to follow the work done by our colleagues and focus on the effects for data collection and production of external statistics. Libra has been conceived as a “stablecoin”, a digital coin that will be backed by a basket of fiat currencies. While media have concentrated on Facebook’s project, other collateralized coins with similar features could reach scale in the near future. For an accurate investigation on stablecoins’ present stage of development, see G7 Working Group on Stablecoins (2019). The paper is divided into 4 sections; after this introduction, section 2 provides a brief overview on digital assets (with a focus on the novelty of stablecoins). Section 3, which is the bulk of the paper, discusses about the treatment of digital assets in external statistics and the ways to record them in the Balance of Payments. Concluding remarks are included in section 4. 2 https://libra.org/en-US/wp-content/uploads/sites/23/2019/06/LibraWhitePaper_en_US.pdf 3 For a comprehensive view, see G7 Working Group on Stablecoins (2019): Investigating the impact of global stablecoins. The weight of a “Libra”: are stablecoins a new challenge for external statistics compilers? 3 2 New digital forms of money Digitalization is transforming money and payments systems; innovative forms of “currencies” wax and wane at an unprecedented speed, so that it is impossible to make sense of any innovation without a solid conceptual framework. Waiting for Libra (or related coins), digital money has already surfaced in a variety of contexts. WeChat and Alipay dominate the payments system in China while in Africa mobile providers such as M-Pesa have successfully launched money transfer services. Finally, thousands of digital currencies already exist, enabled by the use of cryptography and Distributed Ledger Technology (Brunnermeier et al., 2019). What do these means of payments have in common? Not much, except the fact that they are digital assets, usable as private means of payments (money) with no backstop from Government or public authorities. Stemming from Adrian and Griffoli (2019), we propose a simplified taxonomy for these digital assets, based on three attributes: Underlying technology, Issuer characteristics and Redemption value. The classification of Figure 1 is neither innovative nor comprehensive, but introduces a basic framework and a reference vocabulary for the rest of the paper. Digital Money Tree Figure 1 The first attribute is technology: transactions using centralized technology go through a central proprietary server, while decentralized ones are settled among several nodes. We will focus only on the latter type, as e-money centralized 4 The weight of a “Libra”: are stablecoins a new challenge for external statistics compilers? transactions are no big deal for statistics compilers, as they use existing payment infrastructures - such as debit or credit cards. The second attribute pertains to the issuer: digital assets having no issuer or representing no claim on the issuer are called crypto-assets, in line with the definition provided by ECB (2019)4. The last attribute is about value: when there is a private entity committed to redeem the digital asset, redemption can occur at either a fixed price or a variable price; in the first case, any possible risk is on the issuer, while in the second case there is no such backstop. 2.1 Crypto-assets In principle, any asset recorded in digital form and enabled by the use of cryptography and Distributed Ledger Technology (DLT) could be deemed a crypto- asset. However, these instruments are at their initial stage of development and undergoing fast changes: even definitions are somewhat inconsistent across time and organizations. As previously said, the ECB points out that the use of DLT technology is a necessary but not sufficient element
Load more

Recommended publications
  • Frequently Asked Questions Coins and Notes July 2020
    Frequently Asked Questions Coins and Notes July 2020 A. Currency Issuance 1. Under what authority does the Bangko Sentral ng Pilipinas (BSP) issue currency? The BSP is the sole government institution mandated by law to issue notes and coins for circulation in the Philippines. In Particular, Section 50 of Republic Act (R.A) No. 7653, otherwise known as The New Central Bank Act, as amended by Republic Act No. 11211, stipulates that the BSP shall have the sole power and authority to issue currency within the territory of the Philippines. It also issues legal tender commemorative notes and coins. 2. How does the BSP determine the volume/value of notes and coins to be issued annually? The annual volume/value of currency to be issue is projected based on currency demand that is estimated from a set of economic indicators which generally measure the country’s economic activity. Other variables considered in estimating currency order include: required currency reserves, unfit notes for replacement, and beginning inventory balance. The total amount of banknotes and coins that the BSP may issue should not exceed the total assets of the BSP. 3. How is currency issued to the public? Based on forecast of currency demand, denominational order of banknotes and coins is submitted to the Currency Production Sub-Sector (CPSS) for production of banknotes and coins. The CPSS delivers new BSP banknotes and coins to the Cash Department (CD) and the Regional Operations Sub-Sector (ROSS). In turn, CD services withdrawals of notes and coins of banks in the regions through its 22 Regional Offices/Branches.
    [Show full text]
  • MONEY, MARKETS, and DEMOCRACY
    MONEY, MARKETS, and DEMOCRACY POLITICALLY SKEWED FINANCIAL MARKETS and HOW TO FIX THEM GEORGE BRAGUES Money, Markets, and Democracy George Bragues Money, Markets, and Democracy Politically Skewed Financial Markets and How to Fix Them George Bragues University of Guelph-Humber Toronto , Ontario , Canada ISBN 978-1-137-56939-4 ISBN 978-1-137-56940-0 (eBook) DOI 10.1057/978-1-137-56940-0 Library of Congress Control Number: 2016955852 © The Editor(s) (if applicable) and The Author(s) 2017 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifi cally the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfi lms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specifi c statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the pub- lisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made.
    [Show full text]
  • Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements
    Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements Final Report and High-Level Recommendations 13 October 2020 The Financial Stability Board (FSB) coordinates at the international level the work of national financial authorities and international standard-setting bodies in order to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies. Its mandate is set out in the FSB Charter, which governs the policymaking and related activities of the FSB. These activities, including any decisions reached in their context, shall not be binding or give rise to any legal rights or obligations. Contact the Financial Stability Board Sign up for e-mail alerts: www.fsb.org/emailalert Follow the FSB on Twitter: @FinStbBoard E-mail the FSB at: [email protected] Copyright © 2020 Financial Stability Board. Please refer to the terms and conditions Table of Contents Executive summary ................................................................................................................. 1 Glossary .................................................................................................................................. 5 Introduction .............................................................................................................................. 7 1. Characteristics of global stablecoins ................................................................................ 9 1.1. Stabilisation mechanism .......................................................................................
    [Show full text]
  • Pricing Free Bank Notesଝ
    Journal of Monetary Economics 44 (1999) 33}64 Pricing free bank notesଝ Gary Gorton* Department of Finance, The Wharton School, University of Pennsylvania, Suite 2300, Philadelphia, PA 19104, USA and National Bureau of Economic Research, Cambridge, MA 02138, USA Received 4 February 1991; received in revised form 20 June 1995; accepted 5 February 1999 Abstract During the pre-Civil War period, US banks issued distinct private monies, called bank notes. A bank note is a perpetual, risky, non-interest-bearing, debt claim with the right to redeem on demand at par in specie. This paper investigates the pricing of this private money taking into account the enormous changes in technology during the period, namely, the introduction and rapid di!usion of the railroad. A contingent claims pricing model for bank notes is proposed and tested using monthly bank note prices for all banks in North America together with indices of the durations and costs of trips back to issuing banks constructed from pre-Civil War travelers' guides. Evidence is produced that market participants properly priced the risks inherent in these securities, suggesting that wildcat banking was not common because of market discipline. ( 1999 Elsevier Science B.V. All rights reserved. JEL classixcation: G21 Keywords: Bank notes ଝThe comments and suggestions of the Penn Macro Lunch Group, participants at the NBER Meeting on Credit Market Imperfections and Economic Activity, the NBER Meeting on Macroeco- nomic History, and participants at seminars at Ohio State, Yale, London School of Economics and London Business School were greatly appreciated. The research assistance of Sung-ho Ahn, Chip Bayers, Eileen Brenan, Lalit Das, Molly Dooher, Henry Kahwaty, Arvind Krishnamurthy, Charles Chao Lim, Robin Pal, Gary Stein, and Peter Winkelman was greatly appreciated.
    [Show full text]
  • A Global Overview of Regulatory Requirements in Asia Pacific, Europe, the Uae and the Us
    STABLECOINS: A GLOBAL OVERVIEW OF REGULATORY REQUIREMENTS IN ASIA PACIFIC, EUROPE, THE UAE AND THE US SEPTEMBER 2019 STABLECOINS: A GLOBAL OVERVIEW OF REGULATORY REQUIREMENTS IN ASIA PACIFIC, EUROPE, THE UAE AND THE US Facebook’s proposed stablecoin, Libra, is dominating the headlines. However, growing interest means increased regulatory and political scrutiny around the globe. As digital assets transcend national borders, what does this mean for those interested in issuing or participating in a stablecoin project? What are the regulatory questions and other challenges that need to be considered? We take a look at the global picture in this comprehensive analysis. What is a stablecoin? arrangements – including the role of the issuer or promoter – can vary. A stablecoin is a type of virtual currency or cryptocurrency1 for which mechanisms This article, originally produced as a are established to minimize price chapter in the Global Legal Insights fluctuations and ‘stabilize’ its value. publication ‘Blockchain and Historically, stablecoins have been used Cryptocurrency Regulation 2020’, to pay for purchases of other virtual describes some of the key legal and currencies (e.g., Bitcoin) on regulatory issues raised by the various cryptocurrency exchanges that did not forms of stablecoins internationally, with a accept cash, and as a safe-haven asset focus on collateralized stablecoins. These during periods when other virtual issues are receiving greater scrutiny in currencies experienced significant price leading international financial markets, declines. Companies like Facebook, with particularly following the announcement of its recently proposed Libra stablecoin, are Facebook’s Libra project. betting that they can overcome the regulatory and political challenges to Collateralized by fiat currency achieve widespread adoption and change Stablecoins collateralized by fiat how people make cross-border currencies have predominantly taken one remittances and payments for consumer of two main forms to date: either with (1) goods and services.
    [Show full text]
  • Quantitative Easing
    Quantitative Easing Seven years since the near collapse of the financial system following the Lehman Brothers bankruptcy, we now seem to Quantitative Easing be at a point where some central banks – the Federal Reserve and the Bank of England in particular – are close to beginning Evolution of economic thinking as it the process of reversing the very loose monetary policy they have pursued in the last seven years. But this process is likely happened on Vox to go very slowly. Moreover, other central banks – the ECB Evolution of economic thinking as it happened on Vox in particular – are not yet in such an enviable position. This means that quantitative easing is likely to remain a fascinating Edited by Wouter J. Den Haan policy that will be discussed on VoxEU.org and elsewhere for quite some time to come. This eBook is the second of the Vox As It Happened series, which gathers together the commentary on important economic issues by the world’s best economists. It maps the evolution of thinking about this policy instrument, paving the way for a more informed debate. a ISBN 978-1-907142-96-3 CEPR Press 9 781907 142963 a A VoxEU.org Book Centre for Economic Policy Research 77 Bastwick Street, London EC1V 3PZ; Tel: +44 (0)20 7183 8801; Email: [email protected]; www.cepr.org CEPR Press Quantitative Easing Evolution of economic thinking as it happened on Vox A VoxEU.org eBook Centre for Economic Policy Research (CEPR) Centre for Economic Policy Research 33 Great Sutton Street London, EC1V 0DX UK Tel: +44 (0)20 7183 8801 Email: [email protected] Web: www.cepr.org ISBN: 978-1-907142-96-3 © CEPR Press, 2016 Quantitative Easing Evolution of economic thinking as it happened on Vox A VoxEU.org eBook Edited by Wouter J.
    [Show full text]
  • Banknote Exchange Rates in the Antebellum United States*
    Federal Reserve Bank of Minneapolis Research Department Banknote Exchange Rates in the Antebellum United States* Warren E. Weber Working Paper 623 September 2002 Preliminary and Incomplete Note: The figures in this paper are designed to be printed in color *The views expressed herein are those of the author and not necessarily those of the Federal Reserve Bank of Min- neapolis or the Federal Reserve System. When the United States won independence from Great Britain in 1786, the new coun- try had only one bank. This did not remain the situation for long, however. By 1800, 28 banks were in existence. Over 250 more banks came into existence by 1820. The rapid growth continued over the next two decades, and by 1840 the country had approximately 600 banks. Although the number of banks fell during the 1840s, there was a huge expansion in the number of banks in the 1850s. As a result in 1860, just before the start of the Civil War, the country had almost 1400 banks. During the antebellum period, all banks had to be chartered by a state.1 Under these state charters, banks were permitted to issue banknotes, which were dollar denominated promises to pay specie to the bearer on demand. Banknotes circulated hand-to-hand and were the largest component of the currency in circulation during the period. Some examples of banknotes are displayed in Figure 1. As the figure shows, banknotes were distinguishable by the issuing bank, this meant that throughout the antebellum period, there were large numbers of different currencies in existence in the country.
    [Show full text]
  • Blockchain & Cryptocurrency Regulation
    Blockchain & Cryptocurrency Regulation Third Edition Contributing Editor: Josias N. Dewey Global Legal Insights Blockchain & Cryptocurrency Regulation 2021, Third Edition Contributing Editor: Josias N. Dewey Published by Global Legal Group GLOBAL LEGAL INSIGHTS – BLOCKCHAIN & CRYPTOCURRENCY REGULATION 2021, THIRD EDITION Contributing Editor Josias N. Dewey, Holland & Knight LLP Head of Production Suzie Levy Senior Editor Sam Friend Sub Editor Megan Hylton Consulting Group Publisher Rory Smith Chief Media Officer Fraser Allan We are extremely grateful for all contributions to this edition. Special thanks are reserved for Josias N. Dewey of Holland & Knight LLP for all of his assistance. Published by Global Legal Group Ltd. 59 Tanner Street, London SE1 3PL, United Kingdom Tel: +44 207 367 0720 / URL: www.glgroup.co.uk Copyright © 2020 Global Legal Group Ltd. All rights reserved No photocopying ISBN 978-1-83918-077-4 ISSN 2631-2999 This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations. The information contained herein is accurate as of the date of publication. Printed and bound by TJ International, Trecerus Industrial
    [Show full text]
  • Micro-Simulation of Transaction Cost Shocks on the Value of Central Bank Collateral
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Lennkh, Rudolf Alvise; Walch, Florian Working Paper Collateral damage? Micro-simulation of transaction cost shocks on the value of central bank collateral ECB Working Paper, No. 1793 Provided in Cooperation with: European Central Bank (ECB) Suggested Citation: Lennkh, Rudolf Alvise; Walch, Florian (2015) : Collateral damage? Micro- simulation of transaction cost shocks on the value of central bank collateral, ECB Working Paper, No. 1793, ISBN 978-92-899-1606-6, European Central Bank (ECB), Frankfurt a. M. This Version is available at: http://hdl.handle.net/10419/154226 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Working Paper Series Rudolf Alvise Lennkh Collateral damage? and Florian Walch micro-simulation of transaction cost shocks on the value of central bank collateral No 1793 / May 2015 Note: This Working Paper should not be reported as representing the views of the European Central Bank (ECB).
    [Show full text]
  • Currency and Coin Shipments, [Circular No. 22-26]
    Circular N o. 26 FEDERAL RESERVE BANK Series o f 1922 OF DALLAS December 23, 1922. CURRENCY AND COIN SHIPMENTS To the Member Bank Addressed: This circular supersedes all previous circulars governing the shipment of currency and coin. Unless otherwise stated, the term “ Federal Reserve Bank of Dallas” includes the El Paso and Houston Branches. A branch of the Dallas City Post Office, known as “ Station K” , is located in the Federal Reserve Bank Building, and to insure prompt handling, all registered mail for­ warded to the Head Office at Dallas should be addressed, “Federal Reserve Bank of Dallas, Station K, Dallas, Texas.” The Federal Reserve Bank of Dallas will absorb all postage, expressage and insurance charges incident to shipment of currency and coin to and from member banks, as well as charges on all telegrams covering wire instructions, providing the conditions as outlined herein are complied with. INCOMING SHIPMENTS CURRENCY In order to assist us in the prompt verification of currency receipts it is requested that the following requirements as to preparation be closely adhered to as otherwise transportation costs will not be allowed. Assorting Currency must be assorted by denomination and each fifty notes or less enclosed in a paper strap marked with the amount and name of remitting bank; no strap to contain different denominations and all notes to be face and top up. Do not, under any circumstances, substitute rubber bands or clips for paper cur­ rency straps. Mutilated or torn notes must be carefully mended with paste or adhesive paper and all pins, clips and other metallic substances must be removed as they cause serious in­ jury to the machinery used in punching and cutting currency.
    [Show full text]
  • Colonial Maryland's Post-1764 Paper Money: a Reply to Ron Michener
    Discuss this article at Journaltalk: https://journaltalk.net/articles/5966 ECON JOURNAL WATCH 15(2) May 2018: 168–178 Colonial Maryland’s Post-1764 Paper Money: A Reply to Ron Michener Farley Grubb1 LINK TO ABSTRACT Ron Michener’s comment (2018) on “Non-Legal-Tender Paper Money: The Structure and Performance of Maryland’s Bills of Credit, 1767–1775” (Celia and Grubb 2016) does not concern our new approach to modeling colonial paper money or our new data reconstructions of colonial Maryland’s paper money accounts.2 Approximately 70 percent of Celia and Grubb (2016) is devoted to forensically reconstructing the paper money accounts of colonial Maryland from 1767 to 1775. Michener does not object to, or comment on, this part of our article. The data on colonial paper monies are sketchy, incomplete, and poorly documented. Celia and Grubb (2016) provides the first major data improvement in over a half-century to colonial Maryland’s paper money accounts. Kudos to my co-author James Celia, who was an undergraduate accounting major at the time, for doing the lion’s share of this forensic accounting data reconstruction. Approximately 13 percent of Celia and Grubb (2016) is devoted to offering a new approach to modeling colonial paper monies. The model decomposes the current market trade value of the average bill in circulation into its expected real asset present value (APV) as a low risk asset, the risk discount on that asset (RD), and its liquidity premium or ‘moneyness’ value (LP). The liquidity premium (LP) is the transaction premium (TP) in subsequent publications of the model (Grubb 2016a; b).
    [Show full text]
  • Response to FSB Stablecoin Consultation
    FINANCIAL STABILITY FSB BOARD Addressing the regulatory, supervisory and oversight challenges raised by “global stablecoin” arrangements Consultative document 14 April 2020 The Financial Stability Board (FSB) is established to coordinate at the international level the work of national financial authorities and international standard-setting bodies in order to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies. Its mandate is set out in the FSB Charter, which governs the policymaking and related activities of the FSB. These activities, including any decisions reached in their context, shall not be binding or give rise to any legal rights or obligations under the FSB's Articles of Association. Contacting the Financial Stability Board Sign up for e-mail alerts: www.fsb.org/emailalert Follow the FSB on Twitter: @FinStbBoard E-mail the FSB at: [email protected] Copyright © 2020 Financial Stability Board. Please refer to: http://www.fsb.org/terms_conditions Addressing the regulatory, supervisory and oversight challenges raised by global stablecoin arrangements Background The G20 called on the FSB in June 2019 to examine regulatory issues raised by “so- called global stablecoin” (GSC) arrangements and to advise on multilateral responses as appropriate, taking into account the perspective of emerging market and developing economies (EMDEs). This consultative document (i) describes GSCs and how they may differ from other crypto-assets and other stablecoins; (ii) analyses the potential risks raised by GSCs; (iii) considers existing regulatory, supervisory and oversight approaches to GSCs and (iv) identifies issues that regulators, supervisors and oversight authorities may need to address; (v) considers the specific challenges arising in a cross-border context, including the need for cross-border cooperation and coordination; and (vi) makes high-level recommendations for regulatory, supervisory and oversight responses, including multilateral actions.
    [Show full text]